Everything on the Table – Importance of Clarity when Designating a Beneficiary

In estate litigation any information regarding the deceased’s intentions must be disclosed as they cannot speak for themselves. From this, the Judge will infer the deceased’s intentions while sorting through a mess of hearsay statements from witnesses.

This was the main issue in Simard v Simard Estate. Verna Simard was a very private and proper person throughout her life. Verna had expressed, referring to her investments, that she specifically wanted to insure everything was set up so as little as possible went into the estate. She was concerned that the funds would be fought over and end up in the wrong hands. Despite this, there was still a lengthy fight between her children over the investment funds in addition to two properties and multiple bank accounts.

Verna had been estranged from three of her four children since her husband’s death in 2006. Verna was still close with her daughter Julie, and had transferred land to her and made her the designated beneficiary on multiple bank and investment accounts. Beneficiary designations allow property to pass outside of the estate, avoid probate, allow the beneficiary to receive the funds directly, and streamline the process of settling the estate.

However, in cases like Verna’s, where she is estranged from most of her family and there is limited documentation, it is not surprising that litigation can arise out of beneficiary designations. The court applied the presumption of resulting trust from Pecore v Pecore to Verna’s chequing account, a joint account, and to some RRIF accounts which all designated Julie as a beneficiary. The presumption was not rebutted by Julie and the assets were brought back in to the estate to be split equally between the four children. The application of Pecore in this case establishes how important it is to review beneficiary designations and to ensure adequate documentation to minimize estate confusion after death. The circumstances arising in Simard are a cautionary tale to both testators and practitioners for maximum clarity regarding designated beneficiaries.

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